Platforms are all over the national and trade press following a spate of IPO announcements and rumours. But what are the implications?
Firstly, who’s doing what?
- Transact listed last month with a valuation of £650m – shares have since increased by 38%.
- Old Mutual Wealth is ‘ready to list as Quilter plc’ expected this year.
- Nucleus hasn’t officially announced plans although its original shareholder agreement says it will consider a ‘liquidity event’ in 2018.
- AJ Bell announced preparation for ‘an IPO towards the end of 2018 or early 2019, with shares set aside for customers.’
- Embark is considering an IPO.
Why now?
These businesses have been open about the possibility of public listing. It’s a clear route to creating liquidity for shareholders including founders, employees and institutional investors. The maturity and profitably of the businesses increase the chances of success and the market is currently bullish about platforms, with Allfunds Bank selling in March 2017 for £1.5bn.
What does it mean for the platform market?
The market was split between corporate-owned platforms and private independents. It is now moving towards a divide between the corporates and the new publicly-listed specialist platforms. Not necessarily a big shift – with founders saying they will stick around and few new shares being created.
Nevertheless, going public usually heralds the start of a new stage in the corporate journey – with scope for M&A activity that could include buying other businesses or even being acquired. Just don’t necessarily expect the sort of investment-fuelled expansion that happened at Google after it minted $1.7bn of new shares for its 2004 market debut.
What it does mean is that there are people out there who believe that platforms are scalable business models. Hargreaves Lansdown makes a nice precedent, listing in 2007 at £2 and increasing to £17 today, having joined the FTSE100 along the way.
The platform market is on the move and we invite you to register to join the debate on where it’s heading at Platforum ID – the Investment Distribution Conference on 4th July 2018.